Renting vs. Buying a New iPhone: What’s the Best Way to Upgrade Every Year?

If you’re someone who always buys the latest iPhone, there are plenty of payment and upgrade options. Apple’s new program, called Apple Upgrade, lets you lease an iPhone for 12 or 24 months. This poses a big question for annual valuation companies: Is renting really cheaper than buying?

With the iPhone 18 Pro starting at $1,199 and the exciting iPhone Duo at $1,999, paying full price for a phone you’ll only keep for a year may seem excessive. Apple Upgrade’s lower monthly payments may seem like the perfect solution to this problem, but leasing isn’t necessarily the most cost-effective option. Buying and trading can often cost less when you bundle everything together. And even if you lease the phone, repurchasing the phone at the end might be the wisest decision.

Here’s what Apple’s extensive iPhone lineup currently looks like (the company still sells the iPhone 16, but it’s not eligible for the Apple upgrade):

*If you buy an iPhone 17 and choose to activate it later with another carrier, the price is $929.

Note that the prices of older devices increased in September 2026 following the Apple event. For simplicity, we compare base storage across all models, but you can upgrade to a model with higher storage for a higher monthly cost.

An important factor to consider is that Apple Upgrade requires connecting your iPhone to AT&T, T-Mobile, or Verizon during signup. Most plans from major carriers are much more expensive than what you can get with an MVNO, so you also need to factor in the cost of your mobile service to determine the true final expense.

At first glance, leasing seems cheaper. But buying leaves you with something of value when you want to upgrade: an iPhone you own that you can trade in for the next one.

Let’s say you buy the iPhone 18 Pro (256GB) for $1,199 today. Apple is currently offering $785 when you trade in an iPhone 17 Pro in good condition, so let’s assume everything will be equal next year. Trading in your 18 Pro for the theoretical 19 Pro next fall would result in an effective cost of $414. Meanwhile, a 12-month lease on the same phone costs $600. When you return it at the end, you don’t get a trade-in credit. In this example, buying and trading would save you approximately $186.

Another way to look at it: Ask how much the phone needs to be worth after a year to make buying cheaper than leasing. The table below shows the trade-in value needed for each model by subtracting the 12-month lease cost from the purchase price. If you get more than this amount on a trade-in, the purchase is cheaper; if you received less, renting and returning is more profitable.

As a reminder, Apple is currently offering up to $270 for the iPhone 16e and $430 for the iPhone 16, making leasing the best option for those. The company will offer $585 for the iPhone Air, $785 for the iPhone 17 Pro, and $885 for the iPhone 17 Pro Max, meaning the trade-in is a better deal for the high-end phones. There is no previous generation equivalent for the iPhone Duo.

Of course, next year’s trade-in values ​​are not guaranteed. Apple might offer less for current models than these numbers suggest. This is an argument in favor of leasing: if Apple decides to be stingy, just return the phone.

There is, however, a big problem with this comparison: you can buy the leased iPhone at the end of the term instead of returning it. And in some cases it might make more sense.

In the Apple Upgrade program, you have three choices at the end of the term: return the phone and start a new lease, buy it back at its original price minus any lease payments you made, or return it and exit the program.

For the iPhone 18 Pro in our example, the buyback after 12 months would be around $599 (before taxes). If Apple then offered you $785 for the phone in trade-in, buying it would put you about $186 ahead of the return. Your net cost for the year would then be $414, which is the same as if you had purchased the phone and traded it in.

But if the trade-in offer was lower than the buy-back price, returning the phone would make more sense. One of the benefits of leasing is flexibility, because it allows you to wait and see what Apple’s trade-in offer is before making a decision. Compare the trade-in price with the total buy-in cost and choose the cheapest option.

If you have an Apple Card with sufficient credit, you can spread the cost of purchasing a new iPhone over 24 months without interest. That works out to around $50 per month for the iPhone 18 Pro, $54 for the iPhone 18 Pro Max, and $83 for the iPhone Duo. These are essentially the same as what Apple charges for 12-month leases.

The difference is that Apple Card financing lasts for 24 months. If you trade in the phone after a year, you still owe the remaining balance. Don’t ignore that extra year of debt when comparing costs. Of course, you need to apply and get approved for the Apple Card first. And for this financing option, you must choose to connect your new phone to AT&T, T-Mobile, or Verizon during checkout. This means that the previously mentioned mobile plan costs come into play again.

Similar to Apple Card financing, be careful with Apple Upgrade’s 24-month leases if you want to upgrade every year. The lower monthly payments can be tempting, but you’ll still have to pay the remaining 12 months of lease payments if you decide to upgrade after a year. At around $35 per month for the iPhone 18 Pro, you’ll still owe $420 more after the first year, bringing your total lease cost to around $840.

Carrier financing options are also available, but current deals are for 36-month plans, which is even less ideal for those who want to upgrade every year.

If you’re upgrading annually, the most important thing to remember is to not let the monthly payment alone dictate your decision. For example, the iPhone Duo’s $83 monthly rental rate (for 12 months) seems like a bargain compared to its sticker price of $1,999. But you’ll still spend almost $1,000 over a year on a device that you won’t own at the end of the term.

Condition is another factor to consider. AppleCare is not included with Apple Upgrade and returning a damaged phone may incur a fee. Poor condition could also reduce the value of your trade-in if you opt to purchase.

Purchasing is the easiest option if you want to own the phone from the start and trade it in when it comes time to upgrade. It also gives you the option to connect to any operator and benefit from reduced mobile plan costs. Apple Card financing can give you a monthly payment that’s almost the same as the lease cost, while still leaving you with a phone that you own and can trade in.

Leasing, on the other hand, offers you more flexibility at the end of the year. Either way, compare what you’ll spend over the entire year and think about what you’ll be left with at the end.